Verve Therapeutics(US:VERV)2023-03-02 12:31PART I Business Verve Therapeutics is a clinical-stage genetic medicines company focused on developing single-course gene editing treatments for cardiovascular disease (CVD), with lead candidates VERVE-101 and VERVE-201 targeting PCSK9 and ANGPTL3 genes respectively, leveraging base editing and LNP delivery systems for a stepwise clinical development plan - Verve Therapeutics is pioneering single-course in vivo gene editing treatments to transform cardiovascular disease (CVD) care from chronic management to a one-time therapy, addressing the root causes of the disease20 - The company's initial programs, VERVE-101 and VERVE-201, target the validated genes PCSK9 and ANGPTL3, respectively, to durably lower blood lipids like LDL-C and reduce the risk of atherosclerotic cardiovascular disease (ASCVD)20 - The lead product candidate, VERVE-101, is currently in a Phase 1b clinical trial (heart-1) for patients with Heterozygous Familial Hypercholesterolemia (HeFH), with the first patient dosed in July 20223187 - In October 2022, the U.S. FDA placed a clinical hold on the Investigational New Drug (IND) application for VERVE-101, requesting additional preclinical data on potency, germline editing risks, and off-target analyses32148 - The second program, VERVE-201, targets ANGPTL3 for Homozygous Familial Hypercholesterolemia (HoFH) and utilizes a proprietary GalNAc-LNP delivery system to bypass the deficient LDL receptor in these patients, with a Phase 1b trial anticipated to start in 2024333590 Our Approach The company employs a tailored approach using precise base editing delivered via non-viral Lipid Nanoparticles (LNPs) to target the liver, prioritizing validated liver-cardiovascular axis genes and leveraging NHP models for rapid preclinical validation to create potent, durable, and safe single-course therapies with scalable manufacturing potential - Verve utilizes base editing, a next-generation gene editing approach that enables precise single-base changes in the genome without making double-stranded DNA breaks, akin to a "pencil" that erases and rewrites a single letter in a gene6164 - The company uses non-viral Lipid Nanoparticle (LNP) delivery for its gene editors due to their natural tropism to the liver, transient expression of editing proteins, and a potentially superior safety profile compared to viral vectors7073 - Target selection is based on strong human genetic evidence, where loss-of-function mutations confer disease resistance without adverse effects, and there is existing clinical proof-of-concept from other therapeutic modalities6772 - A key part of the development strategy is the early and rapid iteration of product candidates in non-human primate (NHP) preclinical models, which are considered powerful predictors of efficacy for liver-directed gene editing and LNP delivery in humans62 Our Gene Editing Programs Verve is advancing a pipeline of in vivo gene editing programs targeting liver-expressed genes implicated in CVD, with lead program VERVE-101 in Phase 1b for HeFH and VERVE-201 in preclinical development for HoFH, employing a stepwise development approach from rare genetic disorders to broader ASCVD populations Verve Therapeutics Pipeline Overview | Target | Indication | Technology | Development Status | | :--- | :--- | :--- | :--- | | PCSK9 (VERVE-101) | Heterozygous familial hypercholesterolemia, ASCVD | Base Editor | Clinical (Phase 1b) | | ANGPTL3 (VERVE-201) | Homozygous familial hypercholesterolemia, Refractory Hypercholesterolemia | Base Editor | IND-enabling | | LPA | ASCVD patients with high blood Lp(a) | Novel Editor | Research | | Undisclosed | Undisclosed ASCVD | Base Editor | Research | | Undisclosed | Undisclosed liver disease (with Vertex) | Novel Editor | Research | - VERVE-101 is in the heart-1 Phase 1b clinical trial in New Zealand and the United Kingdom for patients with HeFH, with initial safety and pharmacodynamic data from the dose-escalation portion expected in the second half of 202387146 - VERVE-201 is being developed for HoFH and refractory hypercholesterolemia, and the company anticipates initiating a Phase 1b clinical trial in 20248990 Intellectual Property and Collaborations Verve's intellectual property strategy combines owned patent applications and in-licensed technologies for gene editing, base editing, CRISPR nucleases, and LNP delivery, supported by key agreements with Beam Therapeutics, Acuitas, Novartis, and a recent strategic collaboration with Vertex for an undisclosed liver disease program - The company has an exclusive, worldwide license with Beam Therapeutics for base editing technology directed at PCSK9, ANGPTL3, and a third cardiovascular target, with Beam retaining opt-in rights for co-development and co-commercialization201202204 - Verve has a non-exclusive, worldwide license from Acuitas Therapeutics for the LNP technology used in its lead product candidate, VERVE-101214 - A non-exclusive license agreement with Novartis provides access to lipid technology used in the research and development of certain product candidates, including VERVE-201221 - In July 2022, Verve entered into a four-year global research collaboration with Vertex Pharmaceuticals to discover and develop an in vivo gene editing program for a single undisclosed liver disease, receiving a $25 million upfront payment59243245 Government Regulation The company's product candidates are subject to extensive regulation as biologics and gene therapies by the FDA in the U.S. and comparable authorities like the EMA in Europe, involving rigorous preclinical testing, multi-phase clinical trials, and marketing approval processes, with ongoing post-approval requirements and evolving regulatory guidance for gene editing technologies - Verve's product candidates are regulated as biologics in the U.S., requiring a Biologics License Application (BLA) for marketing approval, which involves extensive preclinical and clinical data to establish safety, potency, and purity251252 - Gene therapy products are subject to special regulations and guidance from the FDA's Center for Biologics Evaluation and Research (CBER), which may require long-term follow-up of patients for up to 15 years to monitor for potential delayed adverse effects282283285 - In the European Union, gene therapy products are classified as advanced therapy medicinal products (ATMPs) and are reviewed under a centralized procedure by the EMA, involving both the Committee for Advanced Therapies (CAT) and the Committee for Medicinal Products for Human Use (CHMP)346351 - The company may seek expedited review programs such as Fast Track, Breakthrough Therapy, and Priority Review in the U.S., and PRIME designation in the E.U., to potentially accelerate development and review timelines for its product candidates303342663 Risk Factors The company faces substantial risks including the need for significant additional funding due to a history of losses and no commercial products, high development risks from novel gene editing technologies with potential adverse events and regulatory hurdles like the FDA clinical hold on VERVE-101, reliance on third-party collaborators for technology and manufacturing, a dynamic intellectual property landscape, and commercialization challenges from competition, market acceptance, and pricing - The company has a history of significant losses ($157.4 million in 2022) and expects to incur losses for the foreseeable future, requiring substantial additional funding to advance its product pipeline406413 - The FDA has placed the IND application for VERVE-101 on clinical hold in the U.S., and there is no certainty that the hold will be lifted, which could delay or prevent the initiation of U.S. clinical trials431454 - Gene editing, particularly base editing, is a novel and unproven technology in humans, with risks of serious adverse events, undesirable side effects, or off-target edits that could delay or halt development435480482 - The company relies on third parties for critical aspects of its business, including manufacturing (CMOs), research (CROs), and technology licenses (e.g., Beam, Acuitas), which introduces risks related to performance, supply, and compliance503508515 - The intellectual property landscape for genome editing is highly dynamic and litigious, and the company faces risks of infringement claims and challenges to its in-licensed patents, which could interfere with product development541574 Properties The company leases a 105,182 square foot office and laboratory space in Boston, Massachusetts, under a lease expiring in December 2032, which management deems sufficient for current needs - The company's primary facility is a 105,182 square foot leased office and laboratory space in Boston, MA, with the lease expiring in December 2032776 Legal Proceedings As of the report date, Verve Therapeutics is not a party to any material legal proceedings, though it may become involved in litigation in the ordinary course of business in the future - The company is not currently a party to any material legal proceedings778 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Verve's common stock has traded on the Nasdaq Global Select Market under "VERV" since June 16, 2021, with approximately 17 holders of record as of February 27, 2023, and the company has never paid cash dividends, intending to retain earnings for growth, with no equity security purchases made in 2022 - The company's common stock trades on the Nasdaq Global Select Market under the symbol "VERV" since its IPO on June 16, 2021781 - The company has never declared or paid cash dividends and intends to retain any future earnings to finance business operations and expansion783 - Net proceeds from the June 2021 IPO were $281.6 million, none of which had been used as of December 31, 2022, and are invested in money market funds and short-term investments789 Management's Discussion and Analysis of Financial Condition and Results of Operations For the year ended December 31, 2022, Verve Therapeutics reported a net loss of $157.4 million, an increase from $120.3 million in 2021, driven by an 89% increase in operating expenses to $167.6 million primarily due to a $61.9 million rise in R&D costs and $18.7 million in G&A expenses, while recognizing its first collaboration revenue of $1.9 million from Vertex, ending 2022 with $554.8 million in cash, cash equivalents, and marketable securities projected to fund operations into the second half of 2025 Results of Operations (2022 vs. 2021) | (in millions) | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenue | $1.9 | $0.0 | $1.9 | | Research and development | $130.1 | $68.2 | $61.9 | | General and administrative | $37.5 | $18.9 | $18.7 | | Total operating expenses | $167.6 | $87.1 | $80.6 | | Net loss | ($157.4) | ($120.3) | ($37.1) | - Research and development expenses increased by $61.9 million (91%) in 2022, driven by a $26.6 million increase in personnel costs from higher headcount, a $9.3 million increase in preclinical study costs, and a $3.0 million increase in clinical trial costs for the heart-1 trial822823 - General and administrative expenses rose by $18.7 million (99%) in 2022, primarily due to a $12.9 million increase in personnel and facility costs to support growth and a $3.8 million increase in legal and professional fees824830 - The company ended 2022 with $554.8 million in cash, cash equivalents, and marketable securities, which is projected to fund operations and capital expenditures into the second half of 2025802829 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk stems from interest rate changes affecting its $554.8 million in cash, cash equivalents, and marketable securities, though a 10% rate change is not expected to be material due to their short-term nature, with limited but potentially increasing exposure to foreign currency exchange risk and no material effect from inflation in 2022 - The primary market risk is interest rate risk on cash, cash equivalents, and marketable securities ($554.8 million total as of Dec 31, 2022), however, due to short-term maturities, the impact of a 10% rate change is not considered material875 - Exposure to foreign currency exchange risk is not currently significant but may increase as the company contracts with more vendors located outside the United States876 Controls and Procedures Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2022, with no material changes in the fourth quarter of 2022, and as an emerging growth company, this report does not include an attestation report from the registered public accounting firm - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2022882 - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2022883 - As an emerging growth company, the annual report does not include an auditor's attestation report on internal control over financial reporting884 PART III Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance will be incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting of Stockholders889 Executive Compensation Information regarding executive compensation will be incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding executive compensation is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting of Stockholders891 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership of certain beneficial owners and management will be incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding security ownership is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting of Stockholders892 Certain Relationships and Related Transactions, and Director Independence Information concerning related party transactions and director independence will be incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting of Stockholders893 Principal Accounting Fees and Services Information regarding principal accounting fees and services will be incorporated by reference from the company's definitive proxy statement for its 2023 Annual Meeting of Stockholders - Information regarding principal accounting fees and services is incorporated by reference from the definitive proxy statement for the 2023 Annual Meeting of Stockholders894 PART IV Exhibits, Financial Statement Schedules This section details the financial statements of Verve Therapeutics, Inc., including the report from Ernst & Young LLP, along with a comprehensive list of exhibits filed as part of the Annual Report on Form 10-K, while financial statement schedules have been omitted as not required - This item contains the financial statements of Verve Therapeutics, Inc. and the report from its independent registered public accounting firm, Ernst & Young LLP896 - A detailed list of exhibits filed with the report is provided, including the Restated Certificate of Incorporation, Bylaws, material contracts such as license agreements with Beam and Vertex, and executive employment agreements898899